Innis & Gunn return to profit with sales up 22 per cent

Innis & Gunn is now one of Scotland's most popular craft beer brands. (Image: Daily Record)

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Craft brewer Innis & Gunn has booked a return to profit with sales up 22 per cent to £14.3 million in the 2016 year to December.

The Edinburgh-based company said like-for-like volume sales rose 150 per cent to 2.2 million cases, and including the Inveralmond brands, acquired last year with £3.1 million raised from crowdfunding, volume sales were up 175 per cent.

Innis & Gunn said gross profit grew faster than turnover in the 2016 year to December, up 25.4 per cent to £8.52 million (2015: £6.79 million), largely down to currency translations against the weaker pound in the second half of the year.

The company notes in audited accounts, sales in the UK market rose almost 79 per cent to £6.57 million and sales to Europe rose 23 per cent to £2.41 million.

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However sales to rest of world were down nearly 13 per cent to £5.36 million.

As a result of higher sales and currency translations, the company turned around a £275,000 pre-tax loss in 2015 to book a pre-tax profit of £331,000 for the 2016 year.

On an operating level, Innis & Gunn said profits rose to £600,000 last year against a loss of £150,000 in 2015.

Administrative and overhead costs nudged up slightly to £4.89 million (2015: £4.81 million) last year though costs as a percentage of turnover was cut to 34 per cent from 41 per cent the previous year.

Overhead cost increases arose from the Beer Kitchen business, which opened two new outlets in the 2016 year, and the retail business added £1 million to overall turnover for the year.

Innis & Gunn also upped its marketing spend by 22 per cent compared with 2015, and plans to increase spending annually going forward.

The company said it will report “exciting developments” to its shareholders at its autumn “Gathering”, which will include new beer launches, expansion into China and further Beer Kitchen rollouts and further brewery development.

Commenting the 2016 year performance, Innis & Gunn chairman Tony Hunt said: “2016 was an outstanding year for Innis & Gunn and the start of a planned transformation of our business.

Innis & Gunn's Dougal Sharp

“We acquired our first-ever brewery, opened new Beer Kitchens, launched some delicious new beers, achieved record sales volumes and won our 46th award for quality since 2009.

“To top it off, through our crowdfunding we brought nearly 2,000 new shareholders into the Innis & Gunn community.

“Most important of all, we laid the foundations from which we plan to double the size of this business over the next two years.

“Around the world, the opportunity is huge as increasing numbers of consumers develop a taste for authentic craft beer, and thanks to Dougal Gunn Sharp and our highly talented brewing team Innis & Gunn is ideally placed to benefit from that trend.”